Siem Shipping UK Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02857005 (England and Wales)

SIEM SHIPPING UK LIMITED

REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

3

Income Statement

5

Other Comprehensive Income

6

Balance Sheet

7

Statement of Changes in Equity

8

Notes to the Financial Statements

9

DIRECTORS:

Mr C S S Bondi

Mr K Ross

SECRETARY:

Mr C S S Bondi

REGISTERED OFFICE:

40 Brighton Road

Sutton

SM2 5BN

REGISTERED NUMBER:

02857005 (England and Wales)

SENIOR STATUTORY AUDITOR:

Robin Lloyd

AUDITORS:

Rothmans Audit LLP

Statutory Auditors

Chartered Accountants

Fryern House

125 Winchester Road

Chandlers Ford

Hampshire

SO53 2DR

The directors present their report with the financial statements of the company for the year ended 31 December 2021.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2021.

EVENTS SINCE THE END OF THE YEAR

The Company employs a considerable number of Ukrainian and Russian seafarers. The Government of Ukraine has announced a State of Emergency due to the conflict with Russia. The Company and its operations will be affected by the conflict as there will be challenges on an operational level with regards to crewing matters. The Company continually assesses the situation and are putting plans in place to mitigate the conflict has on the business. The Company has minimal trading with Russia and any future business with Russia would be assessed on an individual basis.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

Mr C S S Bondi

Mr K Ross

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Rothmans Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr C S S Bondi - Director

7 September 2022

Opinion

We have audited the financial statements of Siem Shipping UK Limited (the 'company') for the year ended 31 December 2021 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page two, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework and in relation to the company's shipping activities.

Understanding how the company is complying with those regulations by making enquiries of management and those responsible for legal and compliance procedures, including discussions on risk of litigation and known incidences of non-compliance. We corroborated our enquiries through our review of board minutes and relevant correspondence.

Discussing among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion, we identified potential risk areas as estimates and judgements used by management in accounting for long-term contracts and related balances. The risk was addressed by ensuring audit procedures assessed reasonableness of estimates used by obtaining corroborative evidence, as well as considering what could be non-corroborative.

Assessing the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, by discussing with management susceptibility to fraud, considering performance targets and how this may influence results, and assessing the internal control environment. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included assessing the appropriateness of presentation of separately disclosed items and testing manual journals. These procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Robin Lloyd (Senior Statutory Auditor)

for and on behalf of Rothmans Audit LLP

Statutory Auditors

Chartered Accountants

Fryern House

125 Winchester Road

Chandlers Ford

Hampshire

SO53 2DR

7 September 2022

TURNOVER

3

8,576,047

9,707,275

Cost of sales

2,204,990

2,203,092

GROSS PROFIT

6,371,057

7,504,183

Administrative expenses

5,563,025

6,416,965

OPERATING PROFIT

6

808,032

1,087,218

Net exchange gain/(loss)

7

79,707

85,681

728,325

1,001,537

Income from shares in group undertakings

909,256

-

Interest receivable and similar income

8

400,271

408,315

1,309,527

408,315

2,037,852

1,409,852

Interest payable and similar expenses

9

728,781

745,952

PROFIT BEFORE TAXATION

1,309,071

663,900

Tax on profit

10

-

-

PROFIT FOR THE FINANCIAL YEAR

1,309,071

663,900

PROFIT FOR THE YEAR

1,309,071

663,900

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,309,071

663,900

FIXED ASSETS

Intangible assets

11

8,695

25,670

Tangible assets

12

1,098,740

1,098,740

Investments

13

15,962

15,962

1,123,397

1,140,372

CURRENT ASSETS

Stocks

14

71,052

38,621

Debtors

15

16,580,465

19,305,856

Cash at bank

2,251,474

452,870

18,902,991

19,797,347

CREDITORS

Amounts falling due within one year

16

11,530,298

13,750,700

NET CURRENT ASSETS

7,372,693

6,046,647

TOTAL ASSETS LESS CURRENT LIABILITIES

8,496,090

7,187,019

CAPITAL AND RESERVES

Called up share capital

18

2,813,603

2,813,603

Share premium

19

28,413,768

28,413,768

Retained earnings

19

(22,731,281

)

(24,040,352

)

SHAREHOLDERS' FUNDS

8,496,090

7,187,019

The financial statements were approved by the Board of Directors and authorised for issue on 7 September 2022 and were signed on its behalf by:

Mr C S S Bondi - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

$

$

$

$

Balance at 1 January 2020

2,813,603

(24,704,252

)

28,413,768

6,523,119

Changes in equity

Total comprehensive income

-

663,900

-

663,900

Balance at 31 December 2020

2,813,603

(24,040,352

)

28,413,768

7,187,019

Changes in equity

Total comprehensive income

-

1,309,071

-

1,309,071

Balance at 31 December 2021

2,813,603

(22,731,281

)

28,413,768

8,496,090

1.	COMPANY INFORMATION

Siem Shipping UK Limited was incorporated on 27 September 1993 under the Companies Act 1985, as a private limited company and is registered in England and Wales. The principal activity of Siem Shipping UK Limited is that of sea and coastal freight water transport. The address of its registered office is 40 Brighton Road, Sutton, SM2 5BN.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historic cost convention.

The company's functional and presentation currency is US Dollars.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 3.17(d);

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirement of paragraph 33.7.

Preparation of consolidated financial statements

The financial statements contain information about Siem Shipping UK Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 401 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of its parent, Siem Shipowning Inc, STAR Reefers AS, Jerpefaret 12, 0788 Oslo, Norway.

Turnover

Turnover consists of management services and freight revenue on a time-charter basis from voyage charters and time charters. Turnover is derived from ordinary activities, and is stated after trade discounts, other sales taxes and net of VAT.

Income and expenses related to voyages of vessels have been accrued on the basis of the number of days the voyage lasted in the fiscal year. A voyage is defined as starting after unloading from the previous voyage. Expenses in connection with freight-seeking days are expensed as incurred. Income and expenses relating to the pool are included in the accounts on a net basis (T/C).

Intangible fixed assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Intangible assets are being amortised evenly over their useful lives of 5 years.

Tangible fixed assets

All tangible fixed assets are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses.

The cost of tangible fixed assets initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in a manner intended by management.

Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:

Fixtures and fittings

5 years (straight-line method)

Computer equipment

3-5 years (straight-line method)

Deferred drydocking

5 years (straight-line method)

Vessel

25 years (straight-line method)

The vessels are required to be drydocked for inspection and re-licensing, at which point major repaired and maintenance are performed. The company capitalises the costs associated with drydocking as they occur by adding them to the cost of the vessel and amortising them over the period until the next scheduled drydocking.

The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

Fixed assets are derecognised on disposal or when no future economic benefits are expected. On disposal, the difference between the net disposal proceeds and the carrying amount is recognised in the Income Statement.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Lubricating oil and bunkers inventories are valued at the lower of historical cost and market value applying the FIFO (first in first out) principle.

Income tax

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current tax is recognised at the amount of tax payable using the tax rates and laws that that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date. All gains or losses on translation are included in other comprehensive income. All gains or losses arising from normal trading activities are in the Income Statement.

Operating leases

Rentals applicable to operating leases, where substantially all of the benefits and risk of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the Income Statement.

Financial instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the Income Statement. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

Finance income and costs

Finance income and costs are charged to the Income Statement over the term of the debt using the effective interest rate method so that the amount charged is at a constant rate on the carrying amount.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date, and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

-

Determining whether a provision for cargo claims or hull and machinery damage claims are still required.

-

Determining whether to revalue vessels during the year depending on changes to the condition of the asset and/or the market.

Other key sources of estimation uncertainty;

-

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Residual value assessments consider issues such as market conditions, the remaining life of the asset and projected disposal values.

-

Establishing the criteria and assumptions to be used in the impairment review of vessels.

-

Determining the amount to be accrued that relates to cargo damage claims, crew accidents and vessel incidents.

3.

TURNOVER

The turnover and profit before taxation are attributable to the principal activities of the company.

An analysis of turnover by class of business is given below:

2021

2020

$

$

Freight revenue

2,905,290

3,137,194

Management services

5,670,757

6,570,081

8,576,047

9,707,275

4.	EMPLOYEES AND DIRECTORS

2021

2020

$

$

Wages and salaries

2,342,018

2,158,210

Social security costs

284,491

264,550

Other pension costs

196,031

187,824

2,822,540

2,610,584

The average number of employees during the year was as follows:

2021

2020

Administration

21

24

5.	DIRECTORS' EMOLUMENTS

2021

2020

$

$

Directors' remuneration

111,263

115,080

Directors' pension contributions to money purchase schemes

6,885

6,672

6.	OPERATING PROFIT

2021

2020

$

$

Amortisation - intangible assets

16,975

19,298

Amortisation - deferred drydocking

-

273,391

Auditors' remuneration

10,000

10,000

Amounts paid under operating leases - land and buildings

204,206

154,674

7.	EXCEPTIONAL ITEMS

2021

2020

$

$

Net exchange gain/(loss)

(79,707

)

(85,681

)

8.

INTEREST RECEIVABLE AND SIMILAR INCOME

2021

2020

$

$

Bank interest receivable

-

153

Other interest received

400,271

408,162

400,271

408,315

9.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

$

$

Group interest payable

709,434

727,687

Bank charges

19,347

17,998

Other finance costs

-

267

728,781

745,952

10.

TAXATION

Analysis of the tax charge

No liability to UK corporation tax arose for the year ended 31 December 2021 nor for the year ended 31 December 2020.

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2021

2020

$

$

Profit before tax

1,309,071

663,900

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

248,723

126,141

Effects of:

Expenses not deductible for tax purposes

-

2,606

Income not taxable for tax purposes

(172,759

)

-

Movement in deferred tax unprovided

(75,964

)

(128,747

)

Total tax charge

-

-

11.	INTANGIBLE FIXED ASSETS

Software

$

COST

At 1 January 2021

and 31 December 2021

112,104

AMORTISATION

At 1 January 2021

86,434

Amortisation for year

16,975

At 31 December 2021

103,409

NET BOOK VALUE

At 31 December 2021

8,695

At 31 December 2020

25,670

12.	TANGIBLE FIXED ASSETS

Fixtures

and

Deferred

Computer

Vessel

fittings

Drydocking

equipment

Totals

$

$

$

$

$

COST

At 1 January 2021

and 31 December 2021

14,750,000

32,169

837,947

75,633

15,695,749

DEPRECIATION

At 1 January 2021

and 31 December 2021

13,651,260

32,169

837,947

75,633

14,597,009

NET BOOK VALUE

At 31 December 2021

1,098,740

-

-

-

1,098,740

At 31 December 2020

1,098,740

-

-

-

1,098,740

13.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

$

COST

At 1 January 2021

and 31 December 2021

15,962

NET BOOK VALUE

At 31 December 2021

15,962

At 31 December 2020

15,962

14.

STOCKS

2021

2020

$

$

Stocks

71,052

38,621

15.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2021

2020

$

$

Trade debtors

512,844

698,347

Amounts owed by group undertakings

15,909,151

18,014,281

Other debtors

81,346

172,630

VAT

994

-

Prepayments and accrued income

76,130

420,598

16,580,465

19,305,856

16.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2021

2020

$

$

Trade creditors

202,441

299,280

Amounts owed to group undertakings

10,517,960

12,444,428

VAT

-

4,415

Other creditors

254,597

361,787

Accruals and deferred income

555,300

640,790

11,530,298

13,750,700

17.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2021

2020

$

$

Within one year

168,811

204,206

Between one and five years

-

168,811

168,811

373,017